TITLE IV--STUDENT ASSISTANCE

Part B--Federal Family Education Loan Program

SEC. 422. REQUIREMENTS FOR DISBURSEMENTS OF STUDENT LOANS

(a) SPECIAL RULE- Section 428G(a) (20 U.S.C. 1078-7(a)) is amended by adding at the end the following:

`(3) SPECIAL RULE- An institution whose cohort default rate (as determined under section 435(m)) for each of the 3 most recent fiscal years for which data are available is less than 10 percent may disburse any loan made, insured, or guaranteed under this part in a single installment for any period of enrollment that is not more than 1 semester, 1 trimester, 1 quarter, or 4 months.'.

(b) DISBURSEMENT- Section 428G(b)(1) is amended by adding at the end the following new sentence: `An institution whose cohort default rate (as determined under section 435(m)) for each of the three most recent fiscal years for which data are available is less than 10 percent shall be exempt from the requirements of this paragraph.'.

(c) EXCLUSIONS- Section 428G(e) is amended--

(1) by striking `or made' and inserting `, made'; and

(2) by inserting `, or made to a student to cover the cost of attendance in a program of study abroad approved by the home eligible institution if the home eligible institution has a cohort default rate (as calculated under section 435(m)) of less than 5 percent' before the period.

(d) EFFECTIVE DATE- The amendments made by subsections (a) and (b) shall be effective during the period beginning on October 1, 1998, and ending on September 30, 2002.